Speculation: What If The Salary Cap Goes Down?

[HabsDood]

Allocation money should be allowed in times of crisis, the whole thing has to survive, it's a league wide problem.

Take Montréal as an example, they could sell a part of their cap to another team.. For the right price

 

[Legion34]

While this maybe the most logical solution, getting the majority of the players/NHL PA to agree to a salary reduction is a hard sell

it would be much easier for the compliance buyout to be agreed upon as it wouldnt effect the majority of the players/nhlpa (only 30 players) and some of those 30 players that will be given the compliance buyout will actually want the change of scenery since they will get paid anyways

examples
schneider got sent down and maybe forced to bounce between ahl and nhl. This way he gets paid and can potentially get to play in the nhl for much cheaper on another team
same reasoning as above for alzner, baertschi

those are the big name contracts if you could say that. There are also the big contracts of players in the nhl that need a change of scenery to see if they have anything left but due to their cap hit they will not get it with their current team.

Basically what im trying to say is that it will be much easier to convince the nhlpa of 30 buyouts then a universal reduction in salary

a buyout changes nothing. The issue is that they paid players based on 82 games and playoff revenue. A buyout just increases escrow and players get MORE money. Not less it’s literally making it even worse.

tge players have to pay back the difference this year. If the cap goes down next year the owners still have to pay the players back.

the 50/50 split must be maintained.

 

[BruinsBtn]

Even if the season restarted tomorrow the cap is going down. There's too much economic damage already. The first thing to go in a recession is the corporate box and season tickets.

 

[BigFatCat999]

If it goes down, it will have a minimum cap to 75.6 Mil is my bet.

 

[Kaner9]

I love to see the creativity and chaos if it goes down a few mill. So many teams and agents bank on it always going up and theyve been right until now it looks like.

 

[HandshakeLineRespect]

The cap isn’t going to go down. Most likely it will be frozen at current amount for the next 3 years at least.

 

[Legion34]

The cap isn’t going to go down. Most likely it will be frozen at current amount for the next 3 years at least.

that idea that was floated makes no sense.

it’s a 50/50 split. Each year. That’s the CBA. So for them to go beyond that would be a complete game changer.


A frozen cap that allows for HRR of the next year to go towards the last year makes no sense.


The economy collapsed and then H1N1 happened. In the same year. The cap went up 3 million the next. It may likely be the same next year and will go up the year after.

 

[HandshakeLineRespect]

that idea that was floated makes no sense.

it’s a 50/50 split. Each year. That’s the CBA. So for them to go beyond that would be a complete game changer.



A frozen cap that allows for HRR of the next year to go towards the last year makes no sense.


The economy collapsed and then H1N1 happened. In the same year. The cap went up 3 million the next. It may likely be the same next year and will go up the year after.

Wrong.

 

[bert]

How does it not? The Playoffs are a massive revenue stream.

 

[bert]

Who knows if there will even be a 2020/2021 season. Covid-19 might shut down the sporting world well into 2021.

At the rate its spreading in the US right now I am skeptical there will be any hockey at all in 2020. A half season starting in 2021 looks like a best case scenario at this point.

The economy is also taking a nose dive i dont see how on any level the cap doesnt go down. Millions of people have already lost their jobs. Luxuries like NHL games wont be a option for 30% + of the population that used to attend. There will likely be radical changes to keep the league afloat resulting in both the owners and the players taking less its inevitable. As a sens fan I hope this sinks Melnyk personally.

 

[Jack Burton]

The salary cap will be frozen from this point on.

The 2020-2021 season will start (hopefully) on time and I believe that the Cap will be the same as this year.

The economic crunch that we all have felt will carry on into the next season and.......

Wait for it







The CBA.


In my best Garry Bettman impression...

"Who needs a compliance buy out?"

 

[TBF1972]

Allocation money should be allowed in times of crisis, the whole thing has to survive, it's a league wide problem.

Take Montréal as an example, they could sell a part of their cap to another team.. For the right price

Nobody wants Price and his cap hit.

 

[HabsDood]

Nobody wants Price and his cap hit.

I think you misread or something.

 

[txpd]

Whatever happens will be the result of an agreement between the nhl and the pa.

I think we will find that there will not be enough time from reopening the league and free agent signing season to rework the cap. The pa is not going to want to see player moved out of their home in significant numbers for cap compliance.

I believe the cap will be as planned and the league will have a full season to prepare for the changes

 

[canuckking1]

I think it stays the same

 

[Bluesguru]

Instead of cap going down, don’t the players just take a bigger hit on their salary with less money coming back to them on those escrow payments? Bigger issue is possible labor issues arising from all this.

 

[Vitto79]

Likely allow 2 compliance buyouts

 

[Junohockeyfan]

The cap is designed to go up or down depending on league revenues. Those believing it won’t go down are delusional. This is a mathematical formula.

This is the worst economic crisis since the great depression. If the cap doesn’t go down then there are suspect accounting practices at play.

 

[CanadienShark]

if Cap goes down, teams over new Cap do not need to immediately comply, but any deal they make must be Cap Hit reducing

any team under Cap that wants to object, citing unfair advantage, that team gets transferred to it a player and Cap Hit from a Cap-over team, the choice being up to the Cap-over team

for every high Cap team, what's pushing them over the Cap are very most likely bad, big-ticket contracts

Wait so you offer an advantage to teams over the cap, and if you're under the cap, a team over the cap gets to offload their mistake onto you? This just sounds like a shitty parenting method. I hope you're just joking and it went over my head.

 

[CanadienShark]

I mean. I'm not disagreeing that each team should get a free buy out. But calling it the only fair thing to do, is a stretch in my opinion. On the contrary, despite what GM's actions would lead us to believe, the salary cap *ceiling* is not the salary cap requirement. The salary cap is set each season, and has the potential to rise or fall. Yes, this IS a pretty exceptional, unpredictable circumstance. But still - even if the cap were always the exact same, the ceiling represents the ceiling. It represents the absolute maximum you can budget. Not the suggested amount to budget, until you have pennies left to work with. If a GM wants to put his team to within mere dollars of the absolute spending limit in this system, they take on and accept responsibility and risk associated. The league has already intervened on multiple occasions to save GMs from themselves.

And again, I do agree about a free compliance buy-out in this exceptional situation. But, I have limited sympathy for a GM if he wants to try and hit the cap ceiling with a bullseye.

I mean you're not wrong. You're totally right. I think of it like speed limits though. Everyone is expected to drive at least at that speed, despite it being the "limit."

 

[CanadienShark]

The only logical thing to do is for the league to lower all salaries in proportion to how much the cap drops. Forcing every team to buyout players to fit under the cap defeats the purpose of the Cap since you will have teams spending much more while giving a bonus payday to players bought out and then re-signed.It also creates all kinds of unnecessary transactions and chaos when it's easy to avoid.

This very much feels like wishful thinking for many here and just something to talk about for the media. There has yet to be any kind of intelligent reason put forth to create all this kind of chaos for no reason when a fair solution is so simple and obvious.

It's like people think the league is run by 10 year olds.

I think it's hilarious that you ended your post with a comment like that. No chance lowering salaries will fly. It's not so simple.

 

[Junohockeyfan]

I think it's hilarious that you ended your post with a comment like that. No chance lowering salaries will fly. It's not so simple.

absolutely no chance the players will allow a paycut. They will just contribute more to escrow.

 

[Legion34]

absolutely no chance the players will allow a paycut. They will just contribute more to escrow.

but.... that is “pay cut”? Players don’t care about cap hit. They care about money. For example. Say the players would owe 30% in escrow .

option 1. Pay 30% right now. So take the 10% ish that is already gone AND. Then pay an additional 20% today.

so if you made 10 million last year. Then you write a cheque for an additional 2 million today.


option B: take the remaining 20% and pay it back over the next 4 years at 5%.

So now over the next 4 years you pay 500k more back into escrow.

Everyone and their mother would take that.

Your cap hit is now 9.5

 

[Alberta_OReilly_Fan]

if all signing parties to a cba agree to an amendment, then the cba can be amended. we see all sorts of things come up that need the players agreement before it becomes official

so... at some point the players are going to NOT GET PAID. they are ONLY entitled to 50% of hrr. If there is NO HRR, they cant get what they were expecting

so... we know they will have to face reality and at some point they will have to bite the bullet. They could just choose to have a massively low cap hit next year... watch a bunch of guys taking buyouts and others not getting contracts... and all the rest of them getting slammed by a huge escrow...

or they could agree to some amended 1 year formula for the cap

as for the owners… we know they are rich enough if they suffer a 1 year 5-10 million dollar loss on their team, they arent going to feel it. Their teams are easily wealthy enough to handle the debt/temporary loss.

the problem is... this year's revenue wont fund next year's cap the way it was anticipated. BUT WE KNOW REVENUE IS GOING UP IN THE NEXT FEW YEARS. There is additional revenue coming.

I said it earlier but for some reason this idea isnt being adopted as the obvious solution. The league/union have to amend the cba to allow for a 'borrowing' of future earnings to apply for a 1 time special fix to this natural act of god disaster.

the cba/hrr split ultimately comes down to a league/nhlpa agreement. the union does collect and manage the hrr for its players and makes sure the 50/50 split is being properly managed.

the league does manage revenue shares/league tv deals/sponsorships...

the payback of the loan would just be something the players/owners dont even need to worry about... let the bueracrats figure it out.

its an extrodinary circumstance but one that might be repeated in the future. we need a working solution that is easy to implement and will be in place in the future should something of this nature ever happen again.

its a much better solution then seeing a bunch of players lose their jobs while at the same time fans watch their cup contending teams get unfairly ripped apart

 

[Junohockeyfan]

but.... that is “pay cut”? Players don’t care about cap hit. They care about money. For example. Say the players would owe 30% in escrow .

option 1. Pay 30% right now. So take the 10% ish that is already gone AND. Then pay an additional 20% today.

so if you made 10 million last year. Then you write a cheque for an additional 2 million today.


option B: take the remaining 20% and pay it back over the next 4 years at 5%.

So now over the next 4 years you pay 500k more back into escrow.

Everyone and their mother would take that.

Your cap hit is now 9.5

The question is whether the cap is artificially set or if it is tied to the prior year's revenues. There is no provision for the players to take a pay cut coming into next season. Its not something they would accept, nor is it in their best interest. Their only hope is to somehow have an artificially high salary cap that would result in a higher escrow payment.